Small loans for bad credit in higher demand than mortgage loans

Unless one wants small loans, the credit market's incredibly high credit rating requirements leave many grasping at straws when they need financing. Image from Wikimedia Commons.

Demand for bank loans for housing is very low, even though rates are at the lowest in decades. It’s great for those with perfect credit scores, but small loans until payday may be the only credit available for a lot of people for some time.

Demand for mortgage loans drops

The bottom fell out of the real estate market, and it has been scrambling to get back to health ever since. There were some signs of life following the homeowner tax credit, but since it expired, demand for bank loans has stayed low. In fact, according to USA Today, the percentage of Americans counted as homeowners is at the lowest level in more than a decade. The 66.9 percent of Americans that own their homes, or have secured financing through a loan lender to buy a home, has not changed all summer, indicating that people either don’t want, or can’t get a loan to buy a house. It is no surprise that the only people who can get financing have near perfect credit.

Small loans might be all that is left

Small loans like payday loans or cash advances may be the only source of credit left for many people. It’s a growing segment. The payday lending industry began sometime in the late 1980s, and by the early 2000s, had more locations open than McDonald’s or Starbucks. Credit is something that will always be in demand, including a loan until payday, even if states are starting to regulate payday loans out of business.